The Portfolio Committee on Cooperative Governance and Traditional Affairs says it welcomes the intention behind the National Treasury’s decision to temporarily withhold the equitable share transfers to 69 municipalities.
Committee Chairperson Dr Zweli Mkhize says equitable shares are critical in supporting municipalities in the delivery of basic services. He says this decision supports what the committee has been observing during its oversight work in some of the municipalities across the country.
“The decision confirms the seriousness of the governance and financial management failures that the committee has repeatedly raised during its oversight visits for the audited outcomes and unfunded budgets repeat findings of irregular expenditure. Weak consequent management cannot be allowed to continue as if they have no impact on people’s lives,” says Mkhize.
The South African Local Government Association (Salga) says many municipalities are facing severe fiscal and economic pressures that weaken financial sustainability and service delivery.
Salga says while it cannot condone non-compliance, it believes the underlying causes of recurring financial distress must be addressed. It is reacting to the National Treasury’s decision to temporarily withhold the July equitable share allocations to various municipalities in an effort to enforce fiscal discipline.
The association says withholding of equitable share must be balanced against impact on service delivery and the financial sustainability of municipalities.
The National Treasury says this decision comes as a result of fruitless and wasteful expenditure.
Sixteen municipalities of these municipalities are in the Free State.
Salga’s National Spokesperson, Motalatale Modiba says, “Salga acknowledges measures taken to promote sound financial management and accountability across all spheres of government, which are intent of strengthening governance and improving public confidence. It must be pointed out that the local government sector in particular continues to phase structural and fiscal challenges that require urgent support and reform.” – Reporting by Abigail Visagie
About the Author
